SEEK Ltd

SEK Details
Increased ownership in Online Education Services: SEEK Ltd (ASX: SEK), the largest global online employment marketplace with synergistic education businesses, has reported to invest cA$118.5 million to increase its ownership in Online Education Services (“OES”) from 50% to 80%. OES is a joint venture between SEEK and Swinburne University of Technology. SEK aims to have greater flexibility to secure multiple education partners onto the OES platform through the transaction (which is to be funded by SEEK’s existing cash and bank debt facilities). Further, the move is expected to be cash EPS accretive in FY18 and strongly accretive over the medium to long-term. OES has delivered excellent student outcomes post SEK’s investment with 1,500 alumni reported since the first graduates in March 2014; and FY14-FY16 Revenue CAGR of 37% and FY14-FY16 EBITDA CAGR of 33%. SEEK thus aims to leverage OES’ organic growth opportunities via development of new programs, retention initiatives and international expansion. Going forward, OES will be consolidated into SEEK Group Financial Statements. On the other hand, SEK stock has been removed from S&P /ASX 50 Index from March 20, 2017. The stock has fallen 6.11% in the last one year (as at March 17, 2017). The group reported its underlying NPAT growth of 11% for 6 months ended 31 December 2016, and also confirmed FY17 guidance at upper end of range. We maintain a “Hold” recommendation on the stock at the current price of $ 14.96
 

SEK Daily Chart (Source: Thomson Reuters) 

Flight Centre Travel Group Ltd

FLT Details
Challenging trading cycle but improved productivity: Flight Centre Travel Group Ltd.’s (ASX: FLT) stock has fallen 17.3% in last six months (as at March 17, 2017) and slipped 0.79% on March 20, 2017 at the back of softness in market sentiments. Primarily, some recent media reports indicated that the group may need to close about 135 stores in order to rebound to boom witnessed in 2012, on the basis of an analysis note released by Macquarie Group. FLT earlier reported that its first half (1H) sales and profit before tax (PBT) have been in line with its targeted range. However, the result saw weakness owing to challenging global trading cycle with widespread airfare discounting, economic uncertainty and exchange rate volatility. On the other hand, FLT achieved its goal of increasing sales per person which led to improved productivity. Further, 1H total transaction value (TTV) topped $5billion for the first time at the back of strong ticket sales. This was in fact, a record 1H TTV for the 20^th time in 21 years. FLT reported that the underlying PBT was $113.2million, which was just above the mid-point of the targeted range. At the same time, the 1H capital expenditure was $66million against FY16 expenditure of $58million given the investments in systems and shop enhancements, and head office relocations. 

1H Cash Balance (Source: Company Reports)
 
Going forward, FLT expects accelerating TTV growth while trading conditions globally remain uncertain and may continue in the second half. Despite the current challenges, drivers such as cost control efforts, sales channels diversity and performance improvement efforts are expected to boost the group’s performance. We maintain a “Buy” recommendation at the current price of $ 28.60
 

FLT Daily Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.